Prior Week Market Performance:<\/strong><\/p>\n

\n
• The S&P large caps lost 1.6% last week to 2071.26.<\/li>\n
• The Russell 2000\u00a0small caps lost 1.3% last week to 1217.52.<\/li>\n
• Long Bonds (TLT) lost 4.7% last week to 123.50.<\/li>\n
• Asset Allocation Model: unchanged. \u00a0Stocks (52.5%); Bonds (27.5%); Discretionary (20%)<\/li>\n<\/ul>\n

  \u00a0Last Week’s Commentary<\/span><\/strong>: \u00a0Same as the week before. \u00a0The correlation between SPY and TLT (S&P to Long Bonds) is 0.28, implying little correlation at all. \u00a0As long as Yellen and the Fed are going to be cautious about raising rates, TLT and its 2.4% dividend yield is not a bad bet to offset the riskiness of the equity portfolio. \u00a0That being said, we are nearing the point where we’ll start to shift the bond position from long to short. \u00a0That point is coming<\/p>\n

  Current Technical Model Indicators (Short, Med, Long periods):<\/strong><\/p>\n

  \n
  • Large Cap S&P 500 – BUY, BUY, BUY<\/li>\n
  • Mid \u00a0Caps – BUY, BUY, BUY<\/li>\n
  • Small Caps – BUY, BUY, BUY<\/li>\n
  • Micro Caps – BUY, BUY, BUY<\/li>\n
  • Long Bonds – SELL, BUY, BUY<\/li>\n<\/ul>\n

    \u00a0This Week’s Commentary<\/strong><\/span>: \u00a0Ask yourself a question — are you a long term investor or aren’t you? \u00a0That is the question as we look at the past week, and the technical models.<\/p>\n

    The S&P 500 is dead center in the middle of a broadening pattern, and likely to hit some support at where it is right now. \u00a0Implying that it may go up or down but unlikely to drop or gain more than 2.2% in the week, biased to the upside given the support (see chart below).<\/p>\n

    Long term bonds took a tumble last week due to stronger than expected economic news. \u00a0But they have to fall 2% more to cross a 15 month support line. \u00a0Since October there have been two periods of meteoric, unsustainable rise. \u00a0So this downward adjustment is not crazy. \u00a0And probably overblown – 13 of the past 18 days have been down days.<\/p>\n

    If you have been in this market a while, following the asset allocation guidelines in this blog, you are nicely profitable. \u00a0Your long bond basis is 105 (versus the current 123) and your S&P basis is 1314, versus the current 2071.<\/p>\n

    The Asset Allocation model remains unchanged for long term investors. \u00a0IF we were to get further deterioration then it would be time to take a different tack. \u00a0We get closer to a shift from long bonds, but not yet. \u00a0Not yet. \u00a0Be patient.<\/p>\n

    <\/a> <\/a> <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

    Prior Week Market Performance: The S&P large caps lost 1.6% last week to 2071.26. The Russell 2000\u00a0small caps lost 1.3% last week to 1217.52. Long Bonds (TLT) lost 4.7% last week to 123.50. Asset Allocation Model: unchanged. \u00a0Stocks (52.5%); Bonds (27.5%); Discretionary (20%) \u00a0Last Week’s Commentary: \u00a0Same as the week before. \u00a0The correlation between SPY … Read more<\/a><\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0},"categories":[1],"tags":[36,40],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/onthemarkinvesting.com\/wp-json\/wp\/v2\/posts\/1778"}],"collection":[{"href":"https:\/\/onthemarkinvesting.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/onthemarkinvesting.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/onthemarkinvesting.com\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/onthemarkinvesting.com\/wp-json\/wp\/v2\/comments?post=1778"}],"version-history":[{"count":4,"href":"https:\/\/onthemarkinvesting.com\/wp-json\/wp\/v2\/posts\/1778\/revisions"}],"predecessor-version":[{"id":1785,"href":"https:\/\/onthemarkinvesting.com\/wp-json\/wp\/v2\/posts\/1778\/revisions\/1785"}],"wp:attachment":[{"href":"https:\/\/onthemarkinvesting.com\/wp-json\/wp\/v2\/media?parent=1778"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/onthemarkinvesting.com\/wp-json\/wp\/v2\/categories?post=1778"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/onthemarkinvesting.com\/wp-json\/wp\/v2\/tags?post=1778"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}